Chevron's Third Quarter 1999 Net Income Up 26 Percent To $582 Million

CHEVRON'S THIRD QUARTER 1999 NET INCOME UP 26 PERCENT TO $582 MILLION;
OPERATIONAL EARNINGS OF $702 MILLION INCREASED 82 PERCENT

Exploration and production operational earnings more than doubled from last year's third
quarter
- Average U.S. crude oil realizations rose 60 percent to $18.11 per barrel
- Average U.S. natural gas realizations increased 29 percent to $2.48 per thousand cubic
feet
- Worldwide net oil equivalent production increased 4 percent to 1.545 million barrels per
day

Company on target to reduce cost structure $500 million by the end of the year

SAN FRANCISCO, Oct. 25, 1999 -- Chevron Corp. today announced third quarter net income of
$582 million ($0.88 per share -- diluted), an increase of 26 percent from net income of
$461 million ($0.70 per share -- diluted) for the 1998 third quarter. Earnings before
special items of $702 million ($1.07 per share -- diluted) were up 82 percent from $386
million ($0.59 per share -- diluted) earned in last year's quarter.

Third quarter 1999 net income included net charges of $120 million for special items,
compared with net benefits of $75 million in the 1998 quarter. Net special charges in the
1999 quarter were mainly for asset write-downs and the company's share of a loss on the
sale of Koa Oil Co. by Caltex, a 50 percent-owned affiliate. Foreign currency losses of $7
million and $26 million were also included in net income for the 1999 and 1998 quarters,
respectively.

For the first nine months of 1999, net income was $1.261 billion ($1.91 per share --
diluted), down from $1.545 billion ($2.35 per share -- diluted) for the first nine months
of 1998. Excluding special items, earnings were $1.467 billion and $1.442 billion for the
1999 and 1998 year-to-date periods, respectively. Net income for the 1999 period included
net special charges of $206 million, while the first nine months of 1998 included net
benefits of $103 million from special items. For the 1999 nine-month period, net income
included foreign currency losses of $48 million, compared with foreign currency gains of
$24 million for the corresponding period in 1998.

Also contributing to the improved earnings picture were a decline in unit operating costs
and an increase in crude oil and natural gas production. Derr stated, "Our third
quarter operating costs per barrel dipped below the $5 mark -- down about 9 percent from a
year ago. Our worldwide oil equivalent production was up 4 percent from last year's third
quarter. These improvements occurred at the same time as crude oil prices were hitting $25
per barrel for a brief period -- a level we haven't seen since early 1997."

Derr also said the company's previously announced restructuring activities continued to
take shape. During the quarter, the company increased its estimate of staff reductions --
occurring between mid-1999 and mid-2000 -- by 400 to 3,100 employees. Derr noted that the
costs for these additional staff reductions were offset by gains associated with payments
made from the company's pension plan during the third quarter for terminated employees.

"Our restructuring activities will position Chevron to be even more flexible and
efficient in order to take full advantage of future opportunities," Derr continued.
"These efforts to streamline the company -- coupled with our success in growing oil
and gas production while containing costs -- are key elements in our ability to remain
competitive in all of our businesses worldwide."

Derr indicated that the company fully expects to hit its 1999 cost savings target of $500
million by the end of the year. He stated that through the first nine months, Chevron had
already reduced its cost structure by over $400 million -- after excluding costs
associated with special items and the company's growth components in the international
exploration and production and international chemicals businesses. Derr said that on a
companywide basis, unit operating expenses for nine months 1999 declined by about 7
percent to $5.01 per barrel compared with the same period last year.

Derr noted other recent significant events in the company:

Chevron acquired 100 percent of Petrolera Argentina San Jorge, a major oil and gas
exploration and producing company in Argentina. Included in this acquisition was an
interest in the major export pipeline to the Atlantic coast of Argentina and exploration
acreage in key petroleum basins in Argentina, Colombia, Ecuador, Peru, Bolivia and Chile.
San Jorge's recent gross operated production reached 78,000 barrels of oil and 40 million
cubic feet of gas per day.

Chevron took over operatorship in Thailand of Block B8/32, in which it acquired an
approximate 52 percent interest earlier this year. Production of natural gas reached over
140 million cubic feet per day in late September, while production of liquids is expected
to reach 30,000 barrels per day by the end of this year.

In the Caspian Sea area, liquids production at the company's Tengizchevroil joint
venture in Kazakhstan averaged over 215,000 barrels of crude oil per day in the third
quarter, up from 183,000 barrels per day in last year's third quarter. Essential to the
goal of expanding production from the Tengiz field to 700,000 barrels per day by 2010 is
the completion of the pipeline under construction by the Caspian Pipeline Consortium, in
which Chevron has a 15 percent interest. Commitments exceeding $1.5 billion for material
purchases and contract services have been made to date to build this link from the Tengiz
field to the Black Sea. Over $500 million has been expended on the project thus far.
Pipeline completion is scheduled for 2001.

Chevron was appointed the Managing Sponsor of a six-company consortium that was selected
by the Governments of Benin, Ghana, Nigeria, and Togo to develop the West African Gas
Pipeline. This pipeline will be developed to link gas producers in Western Nigeria with
power generation plants in the other countries, initially delivering an estimated 120
million cubic feet of natural gas per day.

Total revenues for the quarter were $10.2 billion, an increase of 32 percent from $7.7
billion in last year's third quarter. For the nine-month period, total revenues were $25.6
billion, up 10 percent from $23.3 billion in the comparable 1998 period. Revenue increases
were mainly the result of higher sales realizations for refined products, crude oil and
natural gas.

Exploration and Production

U.S. exploration and production net income for the 1999 third quarter was $233
million, up from $102 million in the 1998 third quarter. Special items for the 1999 third
quarter included write-downs of $45 million for oil and gas properties in the Gulf of
Mexico. The 1998 quarter included benefits of $18 million from special items. Excluding
these effects, 1999 quarterly earnings more than tripled the 1998 quarter -- primarily the
result of higher crude oil and natural gas prices and lower operating expenses.

The company's average 1999 third quarter U.S. crude oil realizations of $18.11 per barrel
increased $6.80 over last year's third quarter. Average U.S. natural gas realizations of
$2.48 per thousand cubic feet were 56 cents higher than in the 1998 third quarter.

Net U.S. liquids production of 321,000 barrels per day declined slightly from 323,000
barrels per day in the prior-year third quarter. The decrease in liquids production
primarily resulted from property sales, as normal field production declines were offset by
new production. Net U.S. natural gas production of 1.66 billion cubic feet per day
declined from 1.70 billion cubic feet per day in the 1998 third quarter -- attributable to
field production declines and property sales.

International exploration and production net income for the third quarter 1999 was
$322 million, an increase from $161 million in the 1998 quarter. The increase in earnings
reflected significantly higher crude oil and natural gas prices and additional crude-oil
liftings compared with the year-ago quarter. Higher exploration expenses, including a $42
million write-off for an exploratory well in China, reduced earnings about $70 million
between periods. Net international liquids production of 792,000 barrels per day increased
24,000 barrels per day from last year's third quarter. Net natural gas production for the
1999 quarter increased 46 percent to 929 million cubic feet per day, reflecting higher
production in the U.K. North Sea -- where the Britannia Field began producing in August
1998; in Thailand -- as a result of the company's Rutherford-Moran acquisition in early
1999; and in Tengiz and western Canada.

Foreign currency losses were $3 million in the third quarter 1999 -- primarily in the
company's U.K. operations -- compared with gains of $8 million in the 1998 quarter.

Refining, Marketing and Transportation

U.S. refining, marketing and transportation 1999 third quarter net income was
$97 million, about half of the $188 million earned in the third quarter 1998. Net income
for 1999 included special charges of $10 million for environmental remediation. Refined
products margins declined as raw material cost increases outpaced product realizations. In
addition, unplanned unit shutdowns at the Richmond, Calif., refinery had an adverse impact
on earnings. The hydrocracker is under repair from damages incurred in a March 1999 fire,
and the fluid catalytic cracker was taken out of operation for repairs in the current
quarter as well. Third quarter 1998 earnings were reduced by insurance deductible costs
for damages to the Pascagoula, Miss., refinery and other facilities resulting from
Hurricane Georges.

Total refined product sales volumes were 1.357 million barrels per day in the third
quarter 1999, up 3 percent from the comparable quarter last year. Chevron-branded motor
gasoline sales also improved by 3 percent over last year's quarter to 559,000 barrels per
day. Through the third quarter of this year, branded motor gasoline sales have increased 5
percent when compared with the same 1998 period.

International refining, marketing and transportation incurred a net loss of $21
million in the third quarter 1999, compared with a net loss of $46 million reported for
the year-ago quarter. The net loss for the third quarter 1999 included the company's $31
million share of Caltex's loss from the sale of an investment in the Japanese refiner, Koa
Oil Co. The 1998 third quarter net loss included the company's $43 million share of costs
associated with the reorganization of Caltex's management and administrative functions.
The 1999 third quarter results also included an inventory valuation gain of $14 million,
gains of $12 million from the sale of marketable securities and a foreign currency gain of
$1 million, compared with foreign currency losses of $26 million in the 1998 quarter,
primarily in the Caltex areas of operation. Excluding the effect of the items discussed
above, earnings for international downstream operations experienced a decline of $40
million from last year's quarter on lower margins and lower earnings from international
shipping operations.

Total international refined products sales volumes of 892,000 barrels per day increased by
13 percent in the third quarter 1999, reflecting higher sales in the Caltex areas of
operations.

Chemicals

Chemicals net income was $31 million in the 1999 quarter, compared with $14
million in last year's third quarter. Net income for the third quarter of 1998 included
special charges of $5 million. The increase in earnings before special charges was the
result of modest improvements in margins for the company's major chemical products and a
decline in operating expenses.

All Other

All Other incurred net charges of $80 million in the third quarter 1999,
compared with net income of $42 million in the comparable prior-year quarter. Third
quarter 1999 included a special charge for an adjustment to the carrying value of the
company's coal assets, which are held for sale. The 1998 quarter included a special gain
for insurance recoveries.

Earnings before special items for the company's coal operations were $7 million in the
third quarter 1999, compared with $18 million in last year's quarter.

Excluding special items and earnings from coal operations in both periods, net charges of
$53 million in the third quarter 1999 were $28 million lower than the 1998 quarter. Income
tax benefits and gains associated with pension plan activity were partially offset by
higher interest expense.

Capital and Exploratory Expenditures

Capital and exploratory expenditures, including the company's share of
affiliates' expenditures, were $2.172 billion in the 1999 third quarter, compared with
$1.492 billion in the third quarter 1998. Third quarter 1999 expenditures included the
acquisition of Petrolera Argentina San Jorge. Expenditures for the first nine months of
1999 were $4.781 billion, compared with $3.815 billion in the comparable period of 1998.
In addition to the expenditures for the acquisition of Petrolera Argentina San Jorge in
the third quarter, 1999 expenditures also included the acquisition of Rutherford-Moran in
the first quarter.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of
"Safe Harbor" Provisions of the Private Securities Litigation Reform Act of
1995.

Some of the items discussed in this earnings release are forward-looking statements
relating to Chevron's operations that are based on management's current expectations,
estimates and projections about the petroleum, chemical and other industries, in which the
company operates. The statements included in this release are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are difficult to
predict. These include potential changes in crude oil, natural gas and other commodity
prices and potential delays or other changes in work and repair schedules. Actual results
could differ materially from management's estimates.